Political and social activist Tehseen Poonawalla has sounded alarm bells in the corridors of North Block. In a missive shot off to union finance minister Nirmala Sitharaman, Mr Poonawalla has raised concerns over alleged misappropriations in rupee-dollar trading in Gift City.
GIFT (Gujarat International Finance Tec-City) has been set up by the state government as India’s first IFSC that brings together world class infrastructure, connectivity, people and technology on a single platform for businesses across the world.
“I have come to know from the public information that recently started US Dollar and Indian Rupee derivatives trades in Gift city is manipulated with alleged connivance of handful of brokers. As per information with me, on May 12,2020, NSE exchange in Gift city alledgedly allowed trading at USD price of ‘zero’ which is impossible,” Mr Poonawalla points out in the communique.
He has alleged that the ‘clandestine’ move was aimed at evaluating whether any kind of manipulation is possible in Gift City.
Mr Poonawalla has cautioned the government about financial havoc these trade malpractices could wreak in country’s financial system , if gone unnoticed by authorities.
“If found to be tenable by unscrupulous brokers, this manipulation technique will be used as and when required to bring down Indian Rupee value and thereby adversely affect Indian exports and imports. Allowing exchanges to manipulate Indian rupee will amount to a gargantuan loss to exchequer,” the letter highlights about the potential blow to country’s markets.
Mr Poonawalla has hence urged the finance ministry and the state government of Gujrat along with investigative agencies to ‘assiduously’ look into the matter.
“If my observation of the matter holds true , the government will do well to crack down on such furtive trading practices. There is also a glaring possibility that this practice is a part of some thriving international scam,” the letter brings up about possibility of an international scam.
Finance Minister Nirmala Sitharaman last month , while launching INR-USD futures and options contracts, expressed hope that trading of rupee-dollar derivatives contracts in India will generate huge volumes, given the world class business environment and competitive tax regime at GIFT-IFSC.
The minister had launched INR-USD futures and options contracts on the two international exchanges — BSE’s India INX and NSE’s NSE-IFSC, at GIFT-IFSC in Gandhinagar, Gujarat.